Scandinavian Airlines files for bankruptcy protection in US
NEITHER SWEDEN NOR DENMARK WILL BAIL THEM OUT
SAS planes are grounded at Oslo Gardermoen airport
(NTB Scanpix via AP)
TUE, 05 JUL, 2022 - 10:35
JAN M OLSEN, AP
Scandinavian Airlines (SAS) has filed for bankruptcy in the United States, warning that a walkout by 1,000 pilots a day earlier had put the future of the carrier at risk.
The move adds to the likelihood of travel chaos across Europe as the summer vacation period begins.
The Stockholm-based group said it had “voluntarily filed for chapter 11 in the US, a legal process for financial restructuring conducted under US federal court supervision”.
Filing for chapter 11 in New York puts civil litigation on hold while the business reorganises its finances, dubbed SAS Forward.
SAS said that its operations and flight schedule will be unaffected by the announcement.
CEO Anko van der Werff said that the strike had accelerated the move. “I think we have been very clear that this could happen,” he said.
“The important thing is that this is about bankruptcy protection, it is not about a bankruptcy, but it is about financial reconstruction.”
The carrier said it is “in well advanced discussions with a number of potential lenders … to support its operations throughout this court-supervised process”.
The rescue plan, presented in February, is aimed at securing long-term competitiveness.
Pilots reacted strongly to the news of the Chapter 11 filing. Roger Klokset, head of the SAS pilots’ union, said the group “had stretched negotiations and mediation from November last year until the day before the application, without ever having the intention of entering into an agreement with the SAS pilots”.
The pilots in Denmark, Sweden and Norway walked out on Monday, citing inadequate pay and working conditions and expressing dissatisfaction with the decision by the carrier to hire new pilots to fill vacancies at its subsidiary airlines, SAS Link and SAS Connect, rather than re-hire former company pilots laid off due to the pandemic.
Mr van der Werff said the strike was “devastating for SAS and puts the company’s future together with the jobs of thousands of colleagues at stake”.
The walkout is estimated to lead to the cancellation of approximately 50% of all scheduled SAS flights, affecting around 30,000 passengers per day.
Flights operated by SAS Link, SAS Connect and SAS’ external partners are not affected.
The airline is part-owned by the governments of Sweden and Denmark.
In 2018, Norway sold its stake but holds debt in the airline, and has said it might be willing to convert that into equity.
Strike-hit Airline SAS Files For U.S. Bankruptcy Protection
By Anna Ringstrom and Stine Jacobsen
07/05/22 AT
View of SAS Airbus A321 and A320neo aircraft at Kastrup Airport parked on the tarmac, after pilots of Scandinavian Airlines went on strike, in Kastrup, Denmark July 4, 2022. TT News Agency/Johan Nilsson via REUTERS
Scandinavian airline SAS has filed for bankruptcy protection in the United States to help accelerate restructuring plans, it said on Tuesday, warning strike action by pilots had impacted its financial position and liquidity.
Wage talks between SAS and its pilots collapsed on Monday, triggering a strike that adds to travel chaos across Europe as the peak summer vacation period begins.
That accelerated the airline's decision to file for Chapter 11 bankruptcy protection in the United States, the airline's Chief Executive Anko van der Werff said at a press conference on Tuesday.
The company said in a statement it would continue to serve its customers throughout the bankruptcy process, although the pilot strike is impacting its flight schedule.
It said the purpose of the filing with a U.S. federal court was to accelerate a restructuring plan announced in February.
"Through this process, SAS aims to reach agreements with key stakeholders, restructure the company's debt obligations, reconfigure its aircraft fleet, and emerge with a significant capital injection," SAS said in a statement.
It expects to complete the Chapter 11 process in nine to 12 months, it added. SAS shares fell as much as 6% after the filing was announced, and were trading 2% lower at 0728 GMT.
During the pandemic, other non-U.S. airlines including Avianca, Aeromexico and Philippine Airlines have used the Chapter 11 process to renegotiate contracts with key suppliers like aircraft lessors while continuing to operate.
Rival Norwegian Air emerged from bankruptcy protection involving courts in Dublin and Oslo last year.
"It doesn't mean anything for the normal operations. They are trying to repair the motor while driving," Sydbank analyst Jacob Pedersen told Reuters of the SAS filing.
"This is happening because SAS hasn't been able to accomplish the changes through negotiations."
SAS needs to attract new investors and has said that in order to do that it must slash costs across the company, including for staff and for leased planes that stand idle because of closed Russian airspace and a slow recovery in Asia.
The airline said on Tuesday its assessment was that its cash balance of 7.8 billion Swedish crowns ($756 million) was sufficient to meet its business obligations in the near term.
SAS said discussions with lenders regarding another $700 million of financing to support its operations during the restructuring were "well advanced".
It added however that the strike "has a negative impact on the liquidity and financial position of the company and, if prolonged, such impact could become material".
Nordnet analyst Per Hansen said the application showed SAS needs a fresh start and that it thinks the strike will drag on.
"Chapter 11 protection comes early," he said. "Management and the board want to make it absolutely clear for all stakeholders that the situation is very serious."
($1 = 10.3216 Swedish crowns)
TUE, 05 JUL, 2022 - 10:35
JAN M OLSEN, AP
Scandinavian Airlines (SAS) has filed for bankruptcy in the United States, warning that a walkout by 1,000 pilots a day earlier had put the future of the carrier at risk.
The move adds to the likelihood of travel chaos across Europe as the summer vacation period begins.
The Stockholm-based group said it had “voluntarily filed for chapter 11 in the US, a legal process for financial restructuring conducted under US federal court supervision”.
Filing for chapter 11 in New York puts civil litigation on hold while the business reorganises its finances, dubbed SAS Forward.
SAS said that its operations and flight schedule will be unaffected by the announcement.
CEO Anko van der Werff said that the strike had accelerated the move. “I think we have been very clear that this could happen,” he said.
“The important thing is that this is about bankruptcy protection, it is not about a bankruptcy, but it is about financial reconstruction.”
The carrier said it is “in well advanced discussions with a number of potential lenders … to support its operations throughout this court-supervised process”.
The rescue plan, presented in February, is aimed at securing long-term competitiveness.
Pilots reacted strongly to the news of the Chapter 11 filing. Roger Klokset, head of the SAS pilots’ union, said the group “had stretched negotiations and mediation from November last year until the day before the application, without ever having the intention of entering into an agreement with the SAS pilots”.
The pilots in Denmark, Sweden and Norway walked out on Monday, citing inadequate pay and working conditions and expressing dissatisfaction with the decision by the carrier to hire new pilots to fill vacancies at its subsidiary airlines, SAS Link and SAS Connect, rather than re-hire former company pilots laid off due to the pandemic.
Mr van der Werff said the strike was “devastating for SAS and puts the company’s future together with the jobs of thousands of colleagues at stake”.
The walkout is estimated to lead to the cancellation of approximately 50% of all scheduled SAS flights, affecting around 30,000 passengers per day.
Flights operated by SAS Link, SAS Connect and SAS’ external partners are not affected.
The airline is part-owned by the governments of Sweden and Denmark.
In 2018, Norway sold its stake but holds debt in the airline, and has said it might be willing to convert that into equity.
Strike-hit Airline SAS Files For U.S. Bankruptcy Protection
By Anna Ringstrom and Stine Jacobsen
07/05/22 AT
View of SAS Airbus A321 and A320neo aircraft at Kastrup Airport parked on the tarmac, after pilots of Scandinavian Airlines went on strike, in Kastrup, Denmark July 4, 2022. TT News Agency/Johan Nilsson via REUTERSScandinavian airline SAS has filed for bankruptcy protection in the United States to help accelerate restructuring plans, it said on Tuesday, warning strike action by pilots had impacted its financial position and liquidity.
Wage talks between SAS and its pilots collapsed on Monday, triggering a strike that adds to travel chaos across Europe as the peak summer vacation period begins.
That accelerated the airline's decision to file for Chapter 11 bankruptcy protection in the United States, the airline's Chief Executive Anko van der Werff said at a press conference on Tuesday.
The company said in a statement it would continue to serve its customers throughout the bankruptcy process, although the pilot strike is impacting its flight schedule.
It said the purpose of the filing with a U.S. federal court was to accelerate a restructuring plan announced in February.
"Through this process, SAS aims to reach agreements with key stakeholders, restructure the company's debt obligations, reconfigure its aircraft fleet, and emerge with a significant capital injection," SAS said in a statement.
It expects to complete the Chapter 11 process in nine to 12 months, it added. SAS shares fell as much as 6% after the filing was announced, and were trading 2% lower at 0728 GMT.
During the pandemic, other non-U.S. airlines including Avianca, Aeromexico and Philippine Airlines have used the Chapter 11 process to renegotiate contracts with key suppliers like aircraft lessors while continuing to operate.
Rival Norwegian Air emerged from bankruptcy protection involving courts in Dublin and Oslo last year.
"It doesn't mean anything for the normal operations. They are trying to repair the motor while driving," Sydbank analyst Jacob Pedersen told Reuters of the SAS filing.
"This is happening because SAS hasn't been able to accomplish the changes through negotiations."
SAS needs to attract new investors and has said that in order to do that it must slash costs across the company, including for staff and for leased planes that stand idle because of closed Russian airspace and a slow recovery in Asia.
The airline said on Tuesday its assessment was that its cash balance of 7.8 billion Swedish crowns ($756 million) was sufficient to meet its business obligations in the near term.
SAS said discussions with lenders regarding another $700 million of financing to support its operations during the restructuring were "well advanced".
It added however that the strike "has a negative impact on the liquidity and financial position of the company and, if prolonged, such impact could become material".
Nordnet analyst Per Hansen said the application showed SAS needs a fresh start and that it thinks the strike will drag on.
"Chapter 11 protection comes early," he said. "Management and the board want to make it absolutely clear for all stakeholders that the situation is very serious."
($1 = 10.3216 Swedish crowns)
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